March 1, 2018, by Jennifer A. Dlouhy and Mario Parker
President Donald Trump witnessed just how difficult it is to bridge the competing interests of ethanol producers and oil refiners Thursday, as a third White House summit this week ended with no agreement to change U.S. biofuel policy.
Trump has been trying to resolve the complaints of refiners who say the U.S. biofuel mandate is too costly without alienating another key constituency: the ethanol producers and corn farmers who helped elect him president in 2016.
Both sides were represented in the one-hour White House meeting on the subject Thursday, but they left with no breakthrough — and only a commitment to keep talking — according to three people familiar with the discussions who asked not to be named describing the closed-door meeting.
Participants discussed a possible change to U.S. biofuel policy that would effectively cap the price of compliance credits refiners use to prove they have fulfilled annual quotas in exchange for an environmental waiver to allow year-round sales of gasoline containing 15 percent ethanol.
Trump asked for another meeting on the issue next week, the people said.
Jeff Broin, the chief executive of ethanol producer Poet LLC and a participant in the session, said “nothing new was discussed in this meeting.”
“This issue will continue to play out. We will protect interests of this industry, farmers and consumers,” Broin said in a statement after the session.
The Trump administration has been trying to broker a compromise between the warring factions and blunt the political fallout from the bankruptcy of Philadelphia Energy Solutions LLC, the largest refiner in the Northeast U.S. PES chief executive Greg Gatta said the high cost of biofuel compliance credits was a major driver of the company’s bankruptcy filing, on top of weak refining margins and reduced access to cheap domestic crude.
Participants in Thursday’s meeting included the same four Republican senators who met with Trump on the issue Tuesday: Ted Cruz of Texas, Chuck Grassley and Joni Ernst of Iowa and Pat Toomey of Pennsylvania. But the focus was on the 11 industry representatives who came to spell out the economic consequences of potential biofuel policy changes, including the chief executives of ethanol producers Poet, Green Plains Inc. and Renewable Energy Group Inc., as well as refiners Valero Energy Corp., PBF Energy Inc. and Delta Air Lines Inc.’s Monroe Energy LLC.
Bill Horan, a farmer with Western Iowa Energy LLC, and United Steelworkers President Ryan O’Callaghan also participated.
Refiners’ concerns generally center around the compliance credits, known as renewable identification numbers, or RINs, that they use to prove they have satisfied annual biofuel quotas.
Administration officials have been considering a menu of possible changes the Environmental Protection Agency could make without Congress to lower the cost of those RINs and expand the market for ethanol. Options include approving an environmental waiver that would allow gasoline that contains 15 percent ethanol to be sold year-round, and the sale of new ethanol waiver credits for as little as 10 cents apiece as a way to suppress RIN costs.